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Inside the new era for drive-thru.

The brands that are emerging strongest from the coronavirus pandemic are those with drive thrus. Here’s what that means for the future of the restaurant industry.

Kyle Welch had only owned Epic Burger for about 10 months by the time the coronavirus outbreak paralyzed the U.S. economy and shut down dining rooms across the country. A Little Caesars and Cold Stone Creamery franchisee, Welch had acquired the Chicago-based better-burger brand in May 2019 as a way to be more hands-on with a brand, one not too far from his Michigan hometown.

He spent 2019 enhancing the business from a technology standpoint, working with his team to install a new POS system, integrate the third-party platforms, and develop a new mobile app. They even made some operational changes to get service times down from 9–11 minutes to 3–4.

Then the pandemic struck. And with most of Epic Burger’s shops located in downtown Chicago, traffic dissipated in the blink of an eye. The company needed to pivot, and quickly.

It was vice president of operations Michael Cruickshank who had the aha moment: At Epic Burger’s shop in Lincoln Park, adjacent to retailers like Best Buy and West Elm, there was a giant parking lot that was now empty—perfect for a makeshift drive thru. The team marked out queue lines and staffed it with an order taker powered by a mobile POS.

“Later that day, our marketing team came in and made the signs,” Welch says. “We communicated it out to our loyalty email distribution list. We got it out there and we just turned this parking lot into a drive thru, and it worked, and it’s incredible.”

This clever pivot didn’t just demonstrate the power of creative thinking during a crisis. It also proved that the drive-thru operation was the perfect solution to conquer an unprecedented challenge—and that it could be more than just a fast-food staple for the foodservice industry of the future.

A necessary pivot
Like Welch and Epic Burger, other quick-serve and fast-casual operations quickly developed de facto drive thrus once dining rooms were forced to close after the COVID-19 outbreak.

Take Chicken Salad Chick as an example. CEO Scott Deviney says about 40 percent of his brand’s units already had drive-thru windows, but during the pandemic, those that didn’t have one set up tents in their parking lots and parked an employee outside with a tablet POS. Cars could pull up to the tent and place their order with the employee, and then another team member would run their food out.

“That has helped bring in more business, because people see we’re open, and it’s been interesting to watch all the cars pull up on weekends,” Deviney says. “Still, because of our service times being pretty quick, they’re not there long … and we just put it in [their car].”

Indeed, empty parking lots across the country suddenly became rife with opportunity in the wake of the pandemic. And today’s technology was perfectly suited for the occasion. Tablets have already become commonplace in the industry, particularly for line-busting during rush hour. But also, online ordering streamlines the process so that brands can manage a parking-lot drive thru without the need for complications like menuboards, and with more payment options so the outdoor order-taker doesn’t have to handle as much payment as a traditional drive thru.

All of that is surely why brands of all stripes have started talking seriously about drive thrus, both as temporary solutions and as long-term strategies.

Michelle Bythewood, president of Houston-based salad fast casual Salata, says drive thru has become a priority for future expansion. The brand just announced a new mobile ordering app, which will help facilitate an order-ahead drive-thru window; already the 90-unit system has a handful of locations with this strategy in place.

“It’s certainly been advantageous for us to have those, and we have a significantly higher sales AUV with our units that do have that,” Bythewood says. “So [drive thru is] absolutely a priority. But at the very minimum we’re looking at, how do we retrofit some of our locations for just walk-up windows? Because you could do the same process of the customer parking and walking up and grabbing it. I just think the new norm will be thinking through those types of conveniences for our guest.”

Indeed, restaurant companies are leaving no stone unturned when it comes to off-premises innovation. Darren Tristano, CEO of FoodserviceResults, says restaurants’ strategic plans will adapt to focus more heavily on drive-thru impulse ordering and call-ahead pickup. “Fast-casual operators will shift from dine-in locations to adding drive thru to compete more effectively with quick-serve operators,” he says. “Full-service restaurants will begin to develop better curbside features, and in some cases, drive-thru pickup lanes that accommodate parents with small children, customers with disabilities, and other patrons who feel safer not leaving their vehicles.”

Kyle Noonan is CEO at FreeRange Concepts, a Dallas-based company with 11 restaurant locations across four full-service brands, including Bowl & Barrel and The Rustic. Early in the pandemic, FreeRange instituted curbside pickup in what Noonan thought would be a Band-Aid for a few weeks, but it was so successful that he says the company would reengineer its restaurant layout to make curbside a permanent fixture. And drive-thru windows are also on the table, he adds, “just to have that as an option. Because the fast-food operators are just seeing a small decline. Some are up. So that can be a model going forward if, God forbid, something like this ever happens again and we just switched to that drive-thru model.”

Juan Martinez, principal at foodservice industrial engineering firm Profitality, says anyone who can execute a drive thru today should do it. Even those restaurants where drive thru seems incongruous—like full-service establishments—will likely find that the strategy is so successful during the pandemic that they’ll hang onto it once COVID-19 is in the rearview mirror.

“By the time you get to the sales level that you were at before, you’ve already used that [drive-thru] mode, you’ve probably streamlined that mode, you’ve already optimized that mode, and you’re not going to give it up,” Martinez says. “You’re going to pass the sales level you were at eventually, because you didn’t have that mode before. Some of it is going to be a replacement for people who don’t want to eat inside, but some of it is going to be [incremental].”

The about-face on drive thru
It’s not just smaller, nimbler brands that are rethinking their operations as it relates to drive thru. The major chains are, too. Just take Starbucks as an example; the coffee behemoth has struggled mightily during the pandemic, with the company announcing during its Q3 earnings report in July that U.S. comparable sales for the quarter ending June 28 were down 41 percent year-over-year—even as other companies had largely stabilized, and in some cases grown, their comp sales. In May, CEO Kevin Johnson announced that Starbucks was expediting a plan to relocate low-performing units to real estate that could utilize drive thru. And then during the call reporting Q3 earnings in July, Johnson said the company was instituting line-busters with mobile POS devices in Starbucks drive thrus to accommodate the boom in demand.

“The No. 1 thing we can do to continue to grow our same-store comps and the recovery is basically increase the throughput in the channels that are safe, familiar, and convenient,” he said. “Where we deploy this handheld point of sale, we can now have a Starbucks partner out there taking orders, walking through that line of cars, which is going to dramatically increase the throughput at drive thru.”

Chipotle also announced its intentions to prioritize drive thru moving forward. The Mexican fast casual had launched its Chipotlane model in 2018, a distinct change in strategy for the brand that was ushered in shortly after CEO Brian Niccol came over from Taco Bell. Earlier this year it opened its 100th Chipotlane unit, and 21 of 37 new locations in the second quarter included the drive thru. Niccol said during the company’s Q2 earnings report that drive-thru units were seeing about 60 percent of their sales placed digitally, two-thirds of that being order-ahead pickup. He added that sales at the 13 Chipotlane restaurants in the comp base were 10 percent higher than non-Chipotlane restaurants open for the same period, and that sales at newer drive-thru locations were 30 percent higher.

Niccol said the company’s goal is for 60 percent of new Chipotle restaurants in 2020 to have drive thru, and 70 percent in 2021. Similar to Starbucks, Chipotle is so committed to the drive thru that it’s prepared to relocate stores just to add the outdoor lane. “The good news is in this environment, our landlords are more willing to work with us to do a remodel,” Niccol said. “And if they’re not willing to work with us on a remodel, there is a site across the street that we’ll take a look at. So we think the opportunity to move more Chipotlanes over the next three to five years is pretty encouraging.”

Whereas drive thru had previously been anathema to fast-casual brands whose leaders pledged their concepts were a level above quick service, the category had already started its about-face before the pandemic. Along with Chipotle, Washington, D.C.–based Mediterranean fast casual CAVA had launched a drive-thru prototype in 2019, similarly designing the store to be a pickup window for online orders. And other fast casuals like Panera Bread, Corner Bakery, and Pie Five Pizza had invested in drive-thru locations as well.

But the pandemic may have been the final push some brands needed to go all in on drive thru. Shake Shack announced during its Q1 earnings report that it was exploring how it could transition existing locations to more off-premises-friendly operations, including by adding windows for walk-up and drive-up capabilities. Then, in the brand’s Q2 report on July 30, CEO Randy Garutti announced that Shake Shack’s first drive-thru location was slated to open in 2021. Renderings of what the new drive-thru prototype could look like show multiple drive-thru lanes and parking spots for curbside pickup, along with mobile-order pickup stations inside.

Garutti said during the Q2 earnings call that the company hopes to create new access points for customers and new real estate opportunities for the brand. And drive thru inevitably had to be a part of that.

“In the moment of safety, people want to stay in their cars,” he said. “That’s not going to last forever. But obviously, this country has proven that the drive thru in its old form works. We want to do [it] in this new form. We want to do it better than ever.”

More innovation to come
While the drive thru has been a fairly straightforward operation since its advent in the late 1940s, the last few years have seen a range of technological enhancements that have broadened the outdoor lane’s capabilities. For one, mobile devices allowed brands to develop order-ahead platforms that opened a new path for drive thru; that was the nudge that brands like Chipotle and CAVA needed to invest in the operation. Secondly, digital menuboards and artificial intelligence have streamlined some of the more clunky aspects of the drive thru and given restaurants the ability to re-examine labor deployment.

With the coronavirus pandemic pushing the vast majority of quick-service business through the drive thru and forcing new operators to take a look at how they might accomplish such an operation, experts say it’s important to reevaluate the drive thru and find new tactics and efficiencies.

Profitality’s Martinez says there are a number of things operators should consider when working to enhance their outdoor lane, including remote order takers, multiple menuboards to prevent bottlenecking, and a strategy designed not around speed of service but rather on throughput. He adds that for too long quick serves have avoided directing guests to parking spots to fulfill bigger or more complex orders, but that this action is necessary to help keep the window humming.

Ultimately the goal is to set the drive thru up for success on the back end, Martinez says. “Be flexible; work from the inside out,” he says. “Don’t measure cars necessarily. Measure what’s going on inside and measure how you can reduce seconds inside.”

The future of the drive thru, Martinez adds, is something similar to what Shake Shack is accomplishing with its new prototype, where there are multiple lanes, multiple pickup points, and everything is powered by technology. In addition, he recommends operators start talking with landlords about securing four or five parking spots for curbside pickup.

But there’s more innovation to be had in the drive-thru operation. Stephen Jay, SVP and managing director at brand experience firm Big Red Rooster, says that innovation to date has surrounded operational strategies and not ways that “transform the customer experience.” Post-pandemic, he expects companies to drastically change that piece of the drive thru, particularly as it relates to contactless payment and BOPIS (buy online, pick up in store).

“[Brands] first and foremost need to recognize that their customers are still very, very anxious … about protecting their own personal space and avoiding physical contact, and many of them are becoming more adept at using the digital technologies for ordering pickup and payment and so forth,” Jay says.

While there’s not going to be a one-size-fits-all approach to the drive thru moving forward, he believes the smartest option is something of a Frankenstein model that includes drive thru, curbside, and delivery, with the mobile device being central to how guests interact with the restaurant. And while ghost kitchens have a role to play, Jay points to the fact that a large portion of the population will be uncomfortable not knowing where their food comes from, thereby proving a need for a physical footprint.

Jay’s vision for the drive-thru future may already be coming to fruition. In September, Burger King revealed a new prototype that boasts dedicated mobile-order and curbside pickup areas with coded food lockers, drive-in parking spots, walk-up order windows, multiple drive-thru lanes, and exterior dining spaces.

Some of these elements play into what Jay calls the “not-so-dark kitchen” for the future, one where the dining room is shrunk or eliminated and the kitchen is expanded.

“You can add drive-thru capacity by adding an additional window, and then off to the side of it, provide much-enhanced BOPIS solutions. You could have warmer lockers where people come in to pick up their food that they had ordered ahead of time,” he says. “And you’ve still got drive-thru traffic wrapping around for those who … have either ordered ahead via mobile and can go through drive-thru pickup, or who simply want to pick up out of the side of the building while social distancing.”

Originally published by QSR as part of their annual drive-thru study.

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